Gunvor withdraws PA Resources bankruptcy request

PA Resources, a Sweden-based oil explorer, will continue its restructuring efforts, after its largest creditor and shareholder, Gunvor Group decided to withdraw its petition for bankruptcy in PA Resources.

On Sunday night Gunvor Group informed the company that it had filed an application for bankruptcy of PA Resources AB, but yesterday, April 14, 2015, it said it would pull the petition.

To remind, the cash strapped PA Resources late in March, sought court protection from creditors, after failing to get a deferral of interest and principal due in respect of the bonds until April 30, 2015.

In a letter to its creditors dated April 2, PA Resources said that „the company’s financial difficulties are, among other things, attributable to business decisions made by previous management, especially decisions related to the investment in the Azurite field in the Republic of Congo which has resulted in significant losses for the group. This, coupled with the dramatic drop in oil prices since the summer of 2014 and the Company’s high funding costs, has led to the Company’s liquidity problem becoming acute.“

In a statment today, PA Resources said: „In light of Gunvor Group’s decision to withdraw its petition for bankruptcy of PA Resources AB and, together with the bondholders, lend its support to the reorganisation process the board of directors has decided to continue with the corporate reorganisation.“

The preliminary plan for reorganisation will be presented by the administrator to the creditor’s meeting at the Stockholm District Court this afternoon (April 15, 2015).

The plan is based on reaching agreement with the company’s creditors to provide the company with short-term financing which will support the operations of its subsidiaries in order to maintain the value of the company’s asset portfolio, while the board of directors is reviewing its strategic options, PA Resources explained.

Gunvor last week took over PA Resources’ subsidiary Osborne Resources, which owns interests in Equatorial Guinea, namely the producing Aseng and Alen fields, and the Block I exploration interest.

PA Resources explained that Gunvor has made the move to enforce its security under the reserve based lending facility (RBL), being a pledge over the PA Resources’s shares in its wholly-owned subsidiary, Osborne Resources Limited (“Osborne“).

The effect of this enforcement action is that Osborne is no longer a subsidiary of PA Resources and has become a subsidiary of Gunvor Group.

Offshore Energy Today Staff